The Chancellor’s decision to extend the stamp duty holiday has “put a spring in the step" of the housing market according to the Halifax.
The lender - Britain’s largest - says there’s been a “resurgence” in market activity in recent weeks, with the average house price 6.5 per cent higher than a year ago and a typical home valued at £254,606 in March.
Russell Galley, managing director at the Halifax, says: "A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5% annually, or £15,430 in cash terms.
“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average. The continuation of government support measures has been key in boosting confidence in the housing market. The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.
“Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.”
However, he cautions: "Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”
Agents naturally welcome the continuing strength of the market.
“Sellers who hesitated earlier in the year because they were home-schooling or had concerns about missing the stamp duty deadline are now listing their property” explains Tom Bill, head of residential research at Knight Frank.
“Meanwhile, the prospect of summer holidays means a spring surge in activity is more discernible this year as plans are brought forward, buoyed in many cases by high levels of personal savings accumulated over the last year. Encouraging economic indicators are providing the mood music and as more people get their first or second vaccine shot, they are prompted to act. For these reasons we expect UK house prices to rise by five per cent this year.”
And Jeremy Leaf, former RICS residential chairman and a London agent, adds: “The number of buyer enquiries, sales agreed and transactions were boosted by the stamp duty extension after lockdown and the conveyancing backlog prompted a market pause.
“Faster rollout of the vaccine too has helped to encourage more appraisals and instructions but not at a fast enough rate to head off further upward pressure on prices in the traditionally busier spring market. We have noticed from connected chains that demand is even stronger outside the capital in the race for more space and so many have brought forward home-buying decisions.”